NORTH-East businesses are gearing up for a boom period with rising profitability and employment, figures show.

Companies are also looking to get to grips with the region's skills shortages with many planning to spend more on training this year.

The results of the North East Chamber of Commerce's (NECC) Quarterly Economic Survey for the region paint a positive picture for the North-East economy as a whole, in contrast to predictions at the end of last year.

George Cowcher, NECC chief executive, said: "This is good news for the North-East and reflects anecdotal evidence we have for business performance in the region."

As reflected in the wider UK economy, the service sector is outperforming manufacturing which continues to face harsh global trading conditions.

Mr Cowcher said: "Manufacturing firms operating on the world stage will need the best possible conditions to enable them to compete.

"We should address problems with red tape and skills shortages as they are barriers to future success."

The data, compiled for NECC by Newcastle-based research firm ERS, showed that the first three months of this year had been more difficult for firms - as was predicted in the previous Chamber economic survey.

Sales and orders both in the UK and abroad all slowed along with employment and investment in plant and machinery, however growth was maintained across the board.

The survey also analysed the key issues facing North-East businesses over the coming months and asked what factors would influence future success.

The pressure of regulation topped the table of concerns with 70 per cent of manufacturing firms raising employment regulation as a chief issue with 60 per cent also citing red tape as a major problem. Energy prices are also looming as a problem for manufacturers.